The short answer
A premium compares a share’s market price with NAV per share. A two-sided quote gap compares one buying offer with one selling offer. The same ETF can have both; the percentages are not interchangeable.
Start with net asset value per share
The SEC’s investor bulletin defines NAV per share as assets minus liabilities, divided by the number of shares, and says these ETFs calculate it every business day. NAV is a portfolio-value measure, not simply another name for a price shown on a trading screen.[4]
Copy the fund name, share class or ticker, currency, valuation date and per-share unit into your notes. If a figure is explicitly an estimate, keep that label. Do not relabel a portfolio total as a per-share number or an estimated intraday value as an official daily NAV.
Calculate the premium with NAV as the denominator
Investor.gov defines an ETF premium as a market price above NAV per share. To express that relationship as a percentage, use (market price − NAV per share) ÷ NAV per share × 100. This article’s calculation is a direct numerical description of that definition, not an expected return.[8]
Hypothetical same-time inputs: NAV $50.00 and a share price $50.20. The difference is $0.20 and the premium is 0.20 ÷ 50 × 100 = 0.4%. If the hypothetical share price is $49.80 instead, the signed difference is −0.4%. Neither set of numbers describes a current fund.
Now use a separate two-offer worksheet
For a deliberately simplified example, suppose one counterparty offers to buy a share for $50.18 and another offers to sell one for $50.22, both at the same moment and for the quantity being considered. Define the quote gap in this worksheet as the higher offer minus the lower offer: $0.04. The midpoint is ($50.18 + $50.22) ÷ 2 = $50.20.
A midpoint-relative gap is 0.04 ÷ 50.20 × 100, approximately 0.0797%. That is not the 0.4% premium above: the numerator and denominator are both different. This is illustrative arithmetic, not a reconstruction of an exchange order book, a guarantee of execution or a claim about an actual fund’s spread.
The side of the hypothetical transaction matters
If 100 shares were actually purchased at the example’s $50.22 selling offer, the outlay before other charges would be $5,022. Relative to the assumed $5,000 NAV amount, the difference is $22: $20 from the midpoint-to-NAV gap and $2 from the selling-offer-to-midpoint gap. Do not add the full $4 two-sided gap again; that would double-count the wrong quantity.
If instead those 100 shares were sold at the example’s $50.18 buying offer, the gross proceeds would be $5,018. These are conditional calculations at fixed hypothetical inputs. They say nothing about whether that quantity could trade, what fees apply, or what the asset value will be later.
Do not hide a valuation-date mismatch
Because official NAV is calculated every business day, first check the date on the NAV you copied. The SEC bulletin’s daily calculation requirement does not establish that a number on your screen is contemporaneous with a separately collected offer.[4]
If today’s offer is compared with yesterday’s NAV, label the result exactly that way. It is not a verified same-time premium. Record each input’s timestamp and timezone; where only a date is provided, do not invent an intraday time. A useful worksheet can conclude that the inputs are not comparable.
A premium is a description, not a trading instruction
The cited bulletin has a defined U.S. fund scope and excludes other exchange-traded products not registered under the 1940 Act. Do not extend its framework automatically to a commodity trust, a note or a foreign fund with different disclosures.[4]
Before interpreting any percentage, retain the issuer’s actual NAV disclosure, the market-price definition, the offer side, the quantity and any fees. This guide identifies comparison errors; it does not establish a fair premium, recommend a fund or claim that a price gap must close.
Sources & scope
Links support definitions and methodology. Worked examples are hypothetical, not quotes; the review date is not the observation date of a market value.
- Investor.gov — Updated Investor Bulletin: Exchange-Traded Funds (ETFs) ↗
Source date: 2023-02-23 · Verified: 2026-09-20
- Investor.gov — Premium ↗
Source date: Not stated in the retrieved body · Verified: 2026-09-20